Generate Pre-Payment Claim Review Savings By Aligning Payer & Provider Incentives

December 16, 2020

When it comes to identifying improperly billed services, healthcare payers recognize that clinical claim reviews are an essential tool in their arsenal. An important decision, however, is whether to conduct clinical claim reviews before or after the plan has paid providers.

Post-payment clinical claim reviews lead to resource-intensive "pay-and-chase" work. Payers send multiple letters, spend money on lockbox fees, devote resources to manage and post lockbox inventory, and grapple with complex accounts receivable and collection monitoring and file exchanges. Dispute and appeals periods commonly range from 30 to 90 days.

A better approach is to conduct clinical claim reviews earlier in the claims process — before payments are made. One significant advantage to pre-payment clinical review is that the process better aligns payer and provider incentives. In the pre-pay environment, providers are motivated to submit medical records in a timely fashion to allow for rapid completion of claim reviews. On the payer side, teams must review claims and medical charts quickly to comply with prompt pay guidelines.

Leveraging Technology to Scale Up the Pre-Payment Clinical Claim Review Process

HMS has developed a technology-enabled approach to pre-payment clinical claim reviews that maximizes savings for healthcare payers and speeds the payment process.

Advantages to pre-payment clinical claim review include:

Faster identification and resolution of issues. HMS’ advanced and proven algorithms target claims with the greatest potential for payment errors. As a result, HMS only requests medical records from providers when there is a high probability of improper payment. In addition, providers are more likely to send records in a timely manner, so they can ensure timely payment.

  • Increased provider cooperation. HMS has created a pre-audit communication strategy which aims to reduce provider abrasion. This includes webinars, website information, outreach campaigns, and phone support. These activities educate providers and increase cooperation levels. HMS analyzed provider call volume and discovered that there was a significant decrease in providers calls on pre-payment medical record activity in comparison to the post-payment claim environment.
  • Expedited savings. Pre-payment clinical review improves health plans’ payment integrity efforts. On average, pre-payment clinical claim reviews generate savings in 30 days, compared to the six to 12 months needed for post-payment claim reviews. A recent HMS pre-pay clinical review of 500,000 Medicare members resulted in more than $20 million in projected savings in only nine months. Payers recognized savings within 20 days of the receipt of the first medical record. In addition, there was a notable decrease in appeal rate compared to post-payment clinical reviews.

Plans that have adopted HMS’ pre-payment clinical claim review services avoid payment errors related to diagnosis-related group coding and validation, readmissions, level of care, medical pharmacy and more.

Best Practices for an Effective Pre-Pay Clinical Claim Review Program

Health plans with the most effective pre-pay clinical claim review programs follow three best practices:

  1. Focus on high-quality findings. Targeting claims that have a high likelihood of improper payment leads to low appeal turnover rates and higher dollars recovered per claim while also reducing provider abrasion. 
  2. Require collaborative partnerships. When working with partners like HMS on pre-pay clinical claim review initiatives, leading health plans conduct weekly implementation meetings and monthly reporting meetings to keep the lines of communication. Perhaps even more importantly, payers with successful pre-pay clinical claim review always prioritize strong collaboration among clinical staff on the payer side and provider network management leaders.
  3. Implement a sound process. Health plans that have been most successful with pre-pay clinical claim review look for a payment integrity partner with proven systems and workflows, as well as a team of clinical experts. Key areas of concern include compliance with prompt payment guidelines, knowledge of complex topics like Medicaid reclamation and flexibility in program configuration.

Healthcare payers that have partnered with HMS for pre-pay clinical claim reviews report that the sophisticated, technology-driven approach has reduced the administrative burden associated with the ineffective “pay and chase” method, decreased the number of provider appeals and yielded more savings in less time when compared to traditional post-pay approaches.

To learn more about HMS’ Payment Integrity solutions, including pre-pay clinical claim reviews, schedule a conversation today

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